Morningstar rating: how to invest in the best ETFs
Published: July 21, 2021 by Andrew
The search for reliable information and data has always been essential when evaluating a financial investment and over the years Morningstar has become a leader in providing this data on the internet, making it easier to find this information.
|❓ What is it:||Independent financial investment advice and research|
|💶 Cost:||180 € / year (different plans available)|
|💻 Where to use analysis and datas:||Broker CFD|
The reliability of the data and investor confidence in this company have made it very popular and in this guide we want to show you how to take advantage of the suggestions provided by Morningstar in a simple and profitable way.
The first choice concerns the broker to use for investing. CFD brokers are safe, practical and cheap, therefore the perfect choice to start investing even without large capital. In the list below, eToro stands out because it also offers the possibility of making automatic investments.
Min. Deposit: 200€
Min. Deposit: 400€
Min. Deposit: 10€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
Morningstar: what is it?
Morningstar is a Chicago-based investment research firm that collects and analyzes data on funds, stocks and financial markets.
This company provides a broad line of Internet products, software and paper data for individual investors, financial advisors and institutional clients.
Morningstar’s research and analysis reaches all corners of the planet and among its many offerings, comprehensive reports on mutual funds and exchange-traded funds (the famous ETFs), are widely used by investors to determine quality of the investments themselves.
Information is the basis of investments, knowing the financial data of a company, the structure of an investment fund and the performance and prospects of an ETF can make the difference between a profit and a loss.
History of Morningstar
Morningstar’s story begins with one man, Joe Mansueto, who quit his job as a stock analyst in 1984 when he realized that investors lacked the information they needed to make “smart” decisions.
In the same period, investment funds were gaining momentum and it was necessary to follow their developments and provide updated and reliable data.
From then on, his company Morningstar Inc. has continued to provide data to a large number of investors around the world.
Currently the founder is no longer the head of Morningstar but holds the position of executive chairman.
How Morningstar works
Morningstar as we said, analyzes stocks, markets and investment funds and ranks this information.
Some of these analyzes are available with a subscription to Morningstar, which allows for a greater amount of data available. Others, on the other hand, are available for free and are more generic, such as the ranking of the best ETFs to invest in, the best performing funds and the best balanced ones.
Whether you decide to take advantage of the free information provided by Morningstar or the paid information, you will need an intermediary to carry out some trades that this company suggests and turn them into profitable investments.
How to invest in Morningstar’s ETFs
The easiest way to trade ETFs or other markets is to use a CFD Broker and trade directly online, without paying commissions.
CFDs (contracts for difference) are safe and regulated financial derivatives that allow you to invest by aiming up or down on any stock, including these publicly traded funds, such as oil ETFs.
With CFD Brokers you invest in this way:
- To buy an ETF, you have to buy the CFD of the chosen ETF, and you earn if the fund’s prices rise.
- To focus on the fall in the prices of an ETF, you need to Sell the CFD of the chosen ETF and earn if the prices fall.
Once the desired profit has been reached (up or down), just close the operation and any profit (if you have made the right forecast) will be net, with no commissions to pay.
Buy Morningstar ETF with the best platforms
The best trading platforms are those that have a CONSOB or CySEC license and that comply with the European regulations on financial investments (MiFID II)
CFD brokers (trading platforms) allow you to invest in many markets such as stocks, indices, ETFs, commodities, etc. and the most suitable for investing in ETFs are eToro, ForexTB and Trade.com.
eToro offers the most intuitive trading platform in the world and is the most popular broker on the planet, with 7 million active users.
The CONSOB license confirms the reliability of this intermediary which also allows you to trade on the main ETFs followed by Morningstar, like:
To buy an ETF (or sell it) you need to click on “Trade”, decide whether to Buy or Sell the ETF and how much to bet in the single operation.
What has characterized this Broker over the years has been innovation, which has led him to create a revolutionary automatic investment system called Copy Trading.
With Copy Trading you can copy the market operations of the best traders in the world (on eToro), automatically and free of charge.
Here’s how Copy Trading works:
- Register on eToro
- In the Copy People section you can choose the traders to copy, based on how much they earn
- With a click, Copy Trading will copy the operations of the chosen traders into your account
- At that point you will get the same returns as these trading experts (in proportion to the investment made), at no additional cost
Here’s how much some eToro traders earn (which you can copy):
Click here and choose which trader to copy
Both “automatic” Copy Trading and “manual” trading can also be tested on a free Demo account, without running any risks, because in Demo the money is virtual.Click here to sign up for free
For more details you can read our full review on eToro.
ForexTB is making its way among trading intermediaries for its dedication to training and supporting users of the platform.
This Broker is authorized by CySEC which allows it to offer its services throughout Europe and confirms its absolute reliability.
The training starts with an online trading course considered the best on the market. This ebook explains in detail and comprehensively the basics of trading and is a fundamental step in becoming a true trader. The course can be downloaded for free from the official link below:Click here and download the trading course for free
In addition to the course, ForexTB also offers free Trading Signals that help Broker users in their investment choices. They are indications with a success rate of 70% and are developed by the best analysts at Trading Central. To receive the signals just use the official link below:Click here to get free trading signals
ForexTB offers two trading platforms, both free, to satisfy every need:
- Metatrader 4 is a platform with numerous tools available, which meets the needs of the most experienced traders.
- The web platform is simple and accessible from any browser, without downloading any software.
Read our ForexTB review for more information.
Trade.com provides an excellent trading platform for investing in ETFs and many other financial assets, safely and with a quick and immediate interface.
The security of the Broker is guaranteed by the CONSOB license, which protects investors from scams.
Trade.com also deals with training with a free trading course, a pdf that allows you to quickly learn the basics of technical analysis and the best strategies for earning on the markets.Download the free course by clicking here
In addition to the basics, to become a real trader you need to deepen the strategies and the best way to do it is by following the video courses made available by this Broker.Click here to access the video courses for free
With this Broker you can open an account with only 100 Euros of minimum deposit and invest even a few dollars per transaction, so it is really within the reach of all budgets.Click here to sign up for free
If you want to know more, you can read our Trade.com review.
Morningstar is a respected and trusted source of independent investment analysis, suitable for all levels of investors, from beginners to experts.
The data and research provided by Morningstar includes insights into many markets, not just ETFs, and the Morningstar rating is a sort of “rating” that signals the level of a stock in terms of stability, future prospects, potential, etc.
Full Morningstar data is available through subscription services and publications starting at $ 199 / year, or you can just check out BlackRock’s most profitable funds.
Morningstar has also been listed on the stock exchange since 2005 and is precisely part of the NASDAQ (with the ticker MORN), one of the leading stock market indices in the world.
Below we can see the performance of the MORN stock over the last 5 years, the collapse of the month of March 2020 is clearly visible on the chart but the share price has quickly recovered, returning close to all-time highs.
Morningstar, Inc. (MORN) is a leading provider of information and financial data via the internet but there are competitors looking to gain ground.
This company provides detailed financial data on over 621,000 stocks, mutual funds and other products. It also provides market data on over 15 million indices, stocks options and commodities.
By providing financial information to investors, Morningstar operates in the media, wealth management and publishing industries. It is a respected and reliable source and its data is a reference for traders.
Morningstar revenue in 2019 was $ 1.18 billion, up 15.6% year-over-year.
Three of Morningstar’s main competitors are Bloomberg, LP, MarketWatch, Inc., and Thomson Reuters Corp.
- Bloomberg is famous for its “Bloomberg Terminal,” software that helps large institutional investors monitor stock market activity and generate detailed reports.
- MarketWatch (which is owned by the same company that owns Barron’s and The Wall Street Journal) caters to the individual investor with its wide range of portfolio creation and monitoring tools.
- Thomson Reuters has the ability to provide timely financial information and services to companies and individual investors around the world.
Best ETFs suggested by Morningstar
While Morningstar doesn’t just analyze ETFs, the data on these funds is particularly accurate and followed by major institutional investors.
For this reason, below are some of the highly rated ETFs according to Morningstar, which can offer excellent investment opportunities with low risk.
- SPDR S&P Bank ETF ( KBE )
- iShares TIPS Bond ETF ( TIP )
- VanEck Vectors Gold Miners ETF ( GDX )
- iShares Silver Trust ETF ( SLV )
- iShares MSCI Japan ETF ( EWJ )
- SPDR S&P Biotech ETF ( XBI )
The ETFs we have listed can also be traded through CFD brokers such as eToro, safely and without paying commissions.
Morningstar Premium cost
Before concluding, we dedicate a few more lines to the service subscription conditions. As anticipated, Morningstar allows you to access its content even for free, with an account that is however limited from the point of view of the investment tools available.
To get access to all that Morningstar has to offer, you need to sign up for a Premium membership. For those who are simply curious to understand what it is, before deciding whether or not to subscribe to the service, a trial version of the account is also available which (at the moment) lasts 14 days.
At the end of this period, you will need to choose one of the proposed subscription alternatives to continue enjoying Morningstar Premium.
The available plans are:
- 20€ – 1 month
- 180€ – 1 year
- 300€ – 2 years
- 400€ – 3 years
Main differences between the two account versions:
|Service||Morningstar Basic||Morningstar Premium|
|Weekly / fortnightly newsletters||✔️||✔️|
|Articles, news and analyst comments||✔️||✔️|
|Stock data from the main world markets||✔️||✔️|
|MyPortfolio (up to 5 portfolios)||✔️||✔️|
|MyPortfolio (unlimited + X-Ray analysis)||❌||✔️|
|Export in Excel format of fund / ETF / stocks searches||❌||✔️|
|Fund Analysis, Stock Analysis, ETF Analysis||❌||✔️|
|Instant X-Ray for fund analysis||❌||✔️|
|Data sheets available for download in PDF||❌||✔️|
Very interesting is the possibility of accessing the X-Ray tool, which provides an accurate analysis of your portfolio, highlighting its strengths and weaknesses and thus providing you with ideas to improve your investment strategies.
Morningstar is a company that offers a wide range of analytics services, along with real-time data provided by the industry’s leading consultants and institutions. We are talking about a reliable and respected company, which provides very useful information and data to investors (especially those who do value investing).
In this guide we have explained what this company is and how it works, we have also provided practical tips for investing in the markets through CFD Brokers that allow you to trade on any stock and in particular on ETFs, which are very popular with Morningstar.
If you have little trading experience it is best to start with the Demo accounts, where you can invest with virtual money without risk. After doing some practice, you can make a first deposit on your chosen broker and start trading seriously. Here are the links of the best CFD brokers:
- Access the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Trade.com Demo account for free by clicking here
Morningstar is an analytics and financial services company that offers data to investors around the world.
CFD brokers are the easiest and cheapest way to invest in ETFs.
In our guide we have listed the best ETFs suggested by Morningstar.
eToro is the most suitable Broker to invest in ETFs safely and without paying commissions.